I am not a CPA or even giving adivce on what anyone should do, but something I have seen others do, is:
1) "Incorporate" it as a business one way or another - doesn't cost that much.
2) Dedicate a "space" in your home for your "business". This way you can write off a portion of your heat/electric/gas/mortgage/rent etc.
3) Your business can take a loss for 3 years from what I understand. FREE MONEY!
4) When the "business" fails and takes a loss for three years, close shop, and open (Incorporate) ANOTHER one. Rinse, repeat.
One of the Ex Maryland State Comptrollers is the CPA for a very close family member of mine and their business, and this is what my family member does.
Not advising anyone else do this, but it works for them, and is perfectly legal from what I understand.
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